A Canadian company is suing the government of El Salvador in a World Bank court for the right to mine gold, a case that could set a precedent.
Led by 2011 Goldman Prize winner Francisco Pineda, El Salvadoreans protested the proposed gold mine on the Rio Lempa, a source of water and crop irrigation for 4 million inhabitants. The government listened, opting not to grant the company, Pacific Rim, the final permit for the mine. Pacific Rim’s suit for $77 million in damages has policy makers and environmentalists fretting that international corporations are threatening countries’ sovereignty and dictating their environmental policy.

Mining activists in El Salvador have suffered a rash of disappearances and deaths, although that is not why this case is receiving international attention. Rather, it’s the fact that it landed in an international financial court and focuses on a company that claims to bend over backward to be “green.” Violence around mining conflicts in Latin America is sadly not that uncommon, and the mine sits in a region rampant with street and gang crime, making it unclear whether the violence is related to the mining dispute or to everyday crime. Investigations might clarify matters, but the track record on such efforts is spotty.

Back story:
As the economy has faltered, the price of gold has soared, causing a gold rush. In rich countries, the best ores have been depleted, and environmental scrutiny of mining — along with costs — is on the rise. As a result, 70 percent of gold is now mined in developing countries.

I'll be watching for ...
the World Bank court ruling in this matter. Both sides agree it could be important, either underscoring a country’s right to set its environmental policy or protecting investors from changing political winds.

I’ve been surprised to see the impact these mines have on Latin American communities. In Honduras I visited several towns and villages near a mine run by Canada’s Goldcorp. The water table there had been poisoned by mining operations, and many of the children were losing their hair or were covered with lesions. Women spoke of rampant miscarriages, birth defects, even infertility. These mines are wildly unpopular throughout Central America, and there have been many mass protests against them, but typically nothing changes. If this suit is decided in favor of Pacific Rim, many will see it, rightly or wrongly, as an assault on regional democracy.

I'll be watching:
Before the right-wing coup against him in 2009, former Honduran President Manuel Zelaya had frozen all mining concessions. His return from exile — and the likelihood that his wife will run for president — could give the well-organized antimining forces in Honduras a powerful voice in national politics.

Notable quote:
“A very thorough study was conducted, but unfortunately the results are ... classified.”
— Honduran Secretary of State Dr. Valerio Gutierrez Lopez, when asked about data collected by government-sponsored scientists for a study on a Goldcorp mine’s impacts on environmental and human health.